2017 as predicted by a VC

While having neither superpowers nor a crystal ball, all I can do is try to express my best guesses on what might happen in tech in 2017, based on the extensive research and investments I’ve made with Earlybird Venture Capital.

Source: http://giphy.com/gifs/season-7-the-simpsons-7x23-3o6MbmOgTKbbg4BMoo

Blockchain will suffer from further disillusionment before its massive take-off

We are still at the very early beginning of blockchain’s innovation cycle. In 2016 the scene received incredible media attention, creating high expectations which could barely be satisfied by the still relatively few innovators in active in the field. Many corporates and governments initiated blockchain consortiums, from whom I’m not expecting any significant innovations. Because of lacking standards, scalability and security problems the protocol layers are still pretty immature which will lead to further disappointments and negative media coverage in the near-term — think of the DAO debacle for example. The good thing is that outstanding teams surrounded by extremely strong and open communities are aware of those problems and work their a**** off to solve them, to give you an example: our portfolio company BigchainDB, ethereum or Bitcoin.

Trading crypto currencies and tokens goes mainstream

Further assets will be tokenized and stored on blockchains in 2017 offering great opportunities for speculators and traders. The total market cap of crypto currencies (Bitcoin plus altcoins) will increase to $25 billion by the end of 2017, up from about $16 billion at the end of 2016.

Source: https://coinmarketcap.com/charts/

Easy to use multi token wallets like exodus and seamless, trustless (without the accounts) crypto to crypto exchange platforms such as ShapeShift.io, allow not only for early adopters, developers and bitcoin enthusiast to benefit from the value creation but also more mainstream users. Projects like the Polychain, the hedge fund made up of cryptocurrencies (backed by Andreessen Horowitz and USV) will drive further mainstream attention, tempting further adoption by conventional traders who will then incorporate crypto assets into their portfolios.

Cryptography and self sovereign identity will become the new black

We’ve seen strong tendencies towards autocracy in many countries, leading to a vast extension of international conflicts, governmental power, law enforcement and surveillance. Libertarians and oppositionists have been arrested or worse — the stories of Aaron Swartz, Edward Snowden and Ross Ulbricht represent only the tip of the iceberg. On top of this, sensitive consumer data is hosted on centralized servers in the cloud being a hugely attractive target for hackers. The creators of data sets are either not aware of their data’s tremendous value or simply too powerless and needy for simple services to force the monopolistic data owners for reasonable compensations.

Many of these and more related problems will be resolved through the capabilities of the block chain technology: (1) Privacy can be guaranteed by immutable systems and sophisticated encryption integrated into the wallets. (2) Distributed data storage discourages hackers because of the unreasonable efforts it would require to break into single devices one by one. Storj or maidsafe for example pursue this vision.

Source: https://uport.me/#vision

(3) Self sovereign data ownership means users have full control over their digital identity. uPort is pursuing this amazing vision.

I expect the growing crypto community to launch killer applications ready for mainstream adoption in this space. These will likely run in the backgrounds of applications already in place. In 2017.

SaaS will be consumerized and APIs will want a piece of it

The biggest SaaS success stories of 2017 will be characterized by an outstanding product first approach and further consumerization that will lead to virality within organisations (some call it negative churn). Machine learning will be everywhere, chatbots and mobile first will be deeply routed in the next generation of enterprise software. API ecosystems will play a significant role by opening up data silos and making a company’s software stack run more smoothly. It’s all about automation and seamless integration in SaaS 2017. The predominant words used by founders to answer questions regarding growth strategy will be “like Slack did it”.

Voice will become the next interface standard

As of now Siri, Alexa and Cortana have been rolled out but still lack broad access for third-party apps, something that will change in 2017. The potential for voice interfaces to become a new standard are endless and will enable developers to build applications that connect much more more naturally with human beings. Smartphone keyboards, inconvenient dropdown menus and the like will disappear little by little with huge affects on UX in general. The strong presence of machine learning and the amounts of data points being collected by voice based applications will improve products and allow for much higher degrees of customization, as we’ve seen with google search, Netflix, Facebook or Spotify.

Legal Services and Logistics will face disruption

Among the industries that have barely been touched by digitization are Legal Services and Logistics. Both show some of the significant patterns of disruption, e.g. lack of transparency, volatile prices for certain services, manual and inefficient processes due to a low degree of automation, the absence of innovators and digital DNA within incumbent organizations and huge markets to name a few. In 2017 I expect the next wave of innovation for these sectors to expand more broadly.

European VC will emerge

New VC players with innovative business models will enter the ring (shout out to Stefano Bernardi for his awesome post on the world’s most innovative VC firms) and existing players will drastically improve their services to keep their top tier position. VC operations will benefit from further automation when it comes to deal flow sourcing and prioritizing (@salesforceiq), portfolio communication and synergies (Slack), market analysis (CB Insights), fundraising (PitchBook)or financial reporting tools (no preference yet). More firms will start to build their own software platforms to establish better ecosystems as FundersClub did. For example, in 2017, new later stage funds will be closed in 2017 in continental Europe, ending the Series B,C crunch. Berlin will strengthen its position as Europe’s most relevant tech hub by surpassing the volumes of VC funds raised in UK, as it did in 2015. At least 4 tech IPOs of european companies will take place.


At the end of 2017 I’ll provide the results on whether and how these predictions materialized in the real world. I’d be very happy if only 20% were to become true in one way or another.